Tuesday, January 31, 2012

An Orwellian equilibrium

Sheep preferences over location are not transitive!

You might think this is irrational. But keep in mind that they are sheep. Thinking for oneself is very costly for a sheep, so they adopt a decision rule of do as sheep do. Good sheep go with the flow. Why, if a sheep didn't go with the flow, the other sheep would smack right into it! You might think it is worse to be hit by a car than by other sheep, since they are so fluffy and all...but for a sheep, it is simply too costly to weigh those alternatives.